Thousands of workers exposed to asbestos can continue to claim compensation after a test-case ruling that could cost insurers and employers hundreds of millions of pounds over the next 35 years.

Norwich Union was among the companies spearheading the attempt to stop thousands of compensation payouts each year, which failed in the high court yesterday.

In a test case involving 10 men with pleural plaques - benign scarring on the lining of the lungs, which causes no symptoms - the insurers and British Shipbuilders argued that no compensation should be paid because the men had suffered no injury.

Tens of thousands of claimants have been compensated for pleural plaques since three high court rulings in the mid-80s, which said the condition gave rise to a right to compensation.

But insurers argued that the rulings were wrong and that the pleural plaques were simply a marker for asbestos exposure rather than an injury.

The argument was rejected by Mr Justice Holland, but he cut the levels of compensation payouts.

These had been running at between £12,500 and £20,000 where a final settlement was made, and up to £7,000 where it was left open for the claimant to come back for more if a serious condition developed later.

The judge ruled that those who chose a full and final payment should receive between £6,500 and £7,000, and those who opted for a provisional payment £3,500-£4,000.

One of the 10 claimants, who developed a depressive illness and irritable bowel syndrome through worry, was awarded £10,000.

The men, aged in their 50s and 60s, had worked in shipbuilding, factories, construction and boiler maintenance.

Part of the compensation is for anxiety that a serious illness caused by asbestos exposure may develop, possibly years later.

The union Amicus welcomed the judgment, which it said would affect around 14,000 cases a year. It claimed that the insurers had been trying to "shirk their responsibility" to compensate the workers.

"The test case judgment involving Amicus members will ensure that thousands of workers who have been exposed to asbestos over the past 50 years will continue to be eligible for compensation in the future," an Amicus spokesman said.

Ian McFall, head of asbestos litigation for Thompsons, the solicitors representing two of the men, said: "This judgment is a victory for our clients and everyone else who has a similar claim. This is good law, which puts people before profits."

Asbestos has been described as the biggest occupational health risk faced by workers in Britain. Late last year, actuaries predicted that a surge in asbestos-related claims over the coming decades could cost British insurers, employers and the state up to £20bn. It was estimated that pleural plaques might account for as much as £1.4bn of that total - but Norwich Union said yesterday's judgment could reduce that figure to less than £500m.

Dominic Clayden, the insurer's director of technical claims, said that since medical science had moved on, it was right to have the whole issue looked at again.

While the judge took the view that compensation should be paid, he clearly felt the current awards were too high, Mr Clayden said.

Norwich Union will decide in the next few weeks whether it will take the case to the court of appeal.